How 50 Days Of The Iran War Led To The Loss Of $50 Billion Worth Of Oil
London : The world has lost more than $50 billion in unproduced crude oil since the Iran war began nearly 50 days ago, and the aftershocks of the crisis will be felt for months, even years, according to analysts and Reuters calculations.
Iranian Foreign Minister Abbas Araqchi said on Friday that the Strait of Hormuz is open following the ceasefire agreement reached in Lebanon, while US President Donald Trump said he believes an agreement to end the Iran war will be reached “soon”, although the timing is uncertain.
According to Kpler data, more than 500 million barrels of crude oil and condensate have been withdrawn from the global market since the crisis began at the end of February; this was the largest energy supply disruption in modern history.
In other words, 500 million barrels of oil lost to the market is equivalent to:
Restriction of aviation demand on a global scale for 10 weeks; No road travel around the world for 11 days; There will be no oil for the global economy for five days or so, said Iain Mowat, chief analyst at Wood Mackenzie.
According to Reuters estimates, there is almost a month’s worth of oil demand in the United States, or more than a month’s worth of oil demand in all of Europe.
The U.S. military’s nearly six-year fuel consumption is based on annual use of approximately 80 million barrels starting in fiscal year 2021.
Enough fuel to power the world’s international shipping industry for about four months.
Basic facts:
Gulf Arab countries lost nearly 8 million barrels per day of crude production in March; This is almost equivalent to the combined production of Exxon Mobil and Chevron, two of the world’s largest oil companies.
Jet fuel exports from Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain and Oman have fallen from around 19.6 million barrels in February to just 4.1 million barrels in March and April so far, according to Kpler data. The loss in exports would be enough for about 20,000 round-trip flights between New York’s JFK airport and London Heathrow, Reuters estimates.
Crude oil prices have averaged around $100 per barrel since the conflict began, with those missing volumes representing roughly $50 billion in lost revenue, said Johannes Rauball, senior crude oil analyst at Kpler. This amounts to a 1% cut in Germany’s annual gross domestic product, or roughly the entire GDP of smaller countries like Latvia or Estonia.
COMPLETE RESTORATION MAY TAKE YEARS
Although Iranian Foreign Minister Araqchi said that the Strait of Hormuz is open, the recovery in production and flow is expected to be slow.
Global onshore crude oil stocks have fallen by nearly 45 million barrels so far in April, according to Kpler. Production cuts have reached nearly 12 million barrels per day since the end of March.
Rauball said it could take four to five months for heavy crude oil fields in Kuwait and Iraq to return to normal operating levels, and stocktaking could continue through the summer. Damage to refining capacity and Qatar’s Ras Laffan LNG complex means it could take years for the regional energy infrastructure to be fully repaired.
